It has been a decent year, all in all, for the S&P 500. The benchmark is up about 6.5% year-to-date, and a handful of picks including Micron (MU) and Electronic Arts (EA) are up as much as 50% in 2014.
But after disappointing Q1 numbers and negative guidance the norm for most stocks in Q2, we’ve started to see sentiment shift a bit and a lot more pessimism around the stock market.
Now, pessimism alone doesn’t mean a crash and there are plenty of stocks still at or near all-time highs.
But there is indeed a group of stocks that are struggling now as we enter earnings season, and have momentum working against them big time.
Take these five flops in the S&P as proof:
Delta Stock – Down 13% in the past 30 days
After the merger last year between American Airlines (AAL) and US Airways, it was thought that all carriers would benefit from decreased competition and higher fares. Well, that might have been true a few months ago … but as oil prices have spiked, passenger metrics have fallen and some flights to regions like Venezuela have been curtailed, Delta Air Lines (DAL) has run into some big trouble lately.
Coach Stock – Down 13% in the past 30 days
Coach (COH) is the worst-performing stock in the S&P 500 this year, with a gut-wrenching loss of nearly 40%. But don’t go bargain hunting just yet in this stock, which is clearly cheap for a reason. A huge 21% decline in U.S. same-store sales last earnings report started the descent for this fashionable stock … and fear of continued pressure in the next earnings report has pushed COH stock down materially in the last few weeks, too.
Marathon Petroleum Stock – Down 11% in the past 30 days
One of the many refinery stocks that went on a tear from mid-2012 through the end of last year, Marathon Petroleum (MPC) still is sitting on a tremendous long-term return of 75% over the past two years. However, news that President Barack Obama will start allowing crude oil exports has weighed on this sector big-time recently. That’s because domestic oil has traded at a significant discount to the average global price of crude, and that has led to better margins for domestic refineries like MPC. Going global with U.S. supplies will normalize that spread — and pinch margins at Marathon as a result.
Valero Stock – Down 11% in the past 30 days
Marathon Petroleum’s past success and current troubles are shared by fellow refiner Valero Energy (VLO). The stock has soared 130% in the past two years — well more than double the S&P 500 — but has faded fast in the past 30 days.
Darden Stock – Down 10% in the past 30 days
The pain and suffering of Darden Restaurants (DRI) is well-documented, what with the sale of struggling seafood joint Red Lobster and continued weakness at its Olive Garden chain. Darden has been choppy but stagnant since 2011 … however, in 2014 investors seemed to lose all patience. Shares are down 16% YTD, with much of that coming in the last 30 days as hopes of a turnaround look dim for this struggling restaurant operator.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.
